New Delhi: India's first-quarter growth of 6.1 per cent, highest since the global crisis touched shores last September, hasn't surprised economists who kept their full-year outlook few shades lower than the government's.
The government has kept the growth outlook at 6 per cent
for the current fiscal with an upward bias despite deficient
monsoon. However, economists say growth in following quarters
would not be over 6 per cent due to scanty rainfall.
"Growth was largely in line with ours as well as
consensus forecasts," Citi India said in a research note today
keeping its FY'10 GDP estimate of 5.8 per cent citing "still
unclear" drought impact on the winter crop.
While agricultural growth was up 2.4 per cent, the
negative effect of a poor monsoon (278 out of India’s 593
districts are now drought-hit) and its impact on the summer
crop will be felt in the second and third quarter, it said.
The global economic conditions have finally stabilized,
as reflected in the GDP numbers recently released around the
world, but India’s battle against downside risks is far from
over, Moody's Economy.com, the research arm of Moody's said.
"The drag from exports and foreign investment may have
moderated or even ended, but the drought has emerged as a new
major challenge in India ... agricultural output is bound to
tumble in the coming months on a year-ago basis," it said.
Goldman Sachs, which expected April-June GDP growth of
6.3 per cent, also maintained its FY'10 GDP growth forecast at
5.8 per cent saying that deficient rainfall could reduce
agricultural growth to minus 2 per cent year on year for
"The next two quarters may see lower growth than 6.1 per
cent in this quarter as the impact of poor rains comes on
board," it said, adding the economy continues to have
significant pent-up demand for investment, especially in
infrastructure and in affordable housing.
First Published: Monday, August 31, 2009, 23:59